Ripple’s CEO calls out Gary Gensler ahead of US SEC Opening Brief

Ripple CEO Brad Garlinghouse has criticized outgoing SEC Chairman Gary Gensler for continuing a “regulation-by-enforcement” approach during his tenure. Garlinghouse’s comments come amid ongoing legal disputes between Ripple and the SEC, as the agency prepares to file its opening brief in its appeal of Ripple’s latest legal victory on January 15.

Ripple CEO Brad Garlinghouse attacks Gary Gensler

On X (formerly Twitter) Ripple CEO Brad Garlinghouse the accused Gary Gensler on ignoring the 2024 election and the concerns of the people. “Gensler, very much on brand,” Garlinghouse wrote, “completely commits to his failed agenda of regulation by enforcement to the bitter, bitter end.” This criticism comes in light of Ripple’s legal team seeking to file a motion for the SEC to extend the January 15 due date for the opening brief.

Still, the SEC did not allow the request, and this provoked bitter comments from Ripple officials. Stuart Alderoty, Ripple’s Chief Legal Officer, described the agency’s decision as “a waste of time and taxpayer money.”

Alderoty also spoke positively about Ripple’s legal standing in the ongoing case at the appellate level. He continued, “We look forward to engaging with new SEC leadership to address this issue,” noting that Gary Gensler is canceled to leave the SEC chairmanship on January 20.

The legal dispute was born out of the SEC’s December 2020 lawsuit, which accused Ripple of offering XRP as an unregistered security. However, in a 2023 ruling, the court ruled in favor of Ripple, stating that XRP sales to retail investors were not securities, but the SEC has appealed the decision.

Gary Gensler reflects on crypto policy before departure

Ahead of his exit from the commission, SEC Chairman Gary Gensler has come out to explain his position on regulating the cryptocurrency market in an interview with CNBC. Gensler argued that Bitcoin is not a security, comparing it to gold as a commodity that has worldwide demand. “Bitcoin is a highly speculative, volatile asset,” Gensler said, comparing it to other assets people have invested in for centuries, such as gold.

Nonetheless, Gensler reaffirmed his position that all tokens other than Bitcoin are likely to be considered securities regulated by existing US law. He stated that in most cases the industry has not followed the rules against money laundering, sanctions and securities.

Gensler has been under fire for what the SEC has done through enforcement actions rather than through rulemaking, a view that Ripple and other industry participants have also expressed. At the same time as this, a transaction of 100 million XRP or over $265 million was moved between two unknown wallets as regulators are expected to clear the air soon. In addition, experts are currently predicting a possible upward movement in XRP price with some even expecting the coin to hit $8 soon.

Ripple vs. SEC: What’s Next?

The SEC’s appeal comes after a significant legal setback, with courts recently criticizing the agency’s enforcement practices. A ruling by the Third Circuit Court of Appeals labeled the SEC’s actions in a separate case against Coinbase as “arbitrary” and “capricious.” The court called for greater transparency and clarity in the SEC’s decision-making processes.

With Gensler stepping down on Jan. 20, industry stakeholders anticipate changes under new SEC leadership. Ripple CEO Brad Garlinghouse has expressed optimism about resolving the legal dispute with the incoming administration. Meanwhile, speculation continues around potential regulatory reforms, including clearer guidelines for the classification of digital assets.

In addition, JPMorgan analyst has also noted increased optimism in the crypto sector, pointing to the potential for new exchange-traded funds (ETFs) focused on assets such as XRP and Solana (SOL).

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